On the February 1, Smyth Contracted to Buy Dupont's Van

question 138

Multiple Choice

On the February 1, Smyth contracted to buy Dupont's van. They had agreed that Smyth would pay the price of $7000 on March 1 and take delivery and the risk on that date. Smyth then contracted to sell the van to Smithers on March 5 for $7600. On February 22, Dupont called Smyth and said he wasn't going to sell because he had decided to keep the van. On these facts, which of the following is false?

• A) Dupont's call is an express repudiation of the contract and is an anticipatory breach.
• B) Smyth could agree to call off the contract; neither of them had yet performed.
• C) Smyth could refuse to acknowledge a breach, but that would result in the possibility that the contract could be breached later.
• D) Smyth could acknowledge that Dupont was in breach but has to wait until after the performance date to sue him for breach of contract.
• E) Smyth could refuse to acknowledge a breach and press Dupont to complete the contact.

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Definitions:

Process Costing

An accounting methodology used in manufacturing where costs are applied to a batch of products rather than individual items, suitable for homogeneous products.

Ending Work

Refers to the final stages or completion of tasks or projects in a given period.

Process Inventory

Refers to the goods and materials held by a company during its manufacturing process but not yet completed.

Cost System

A method or set of procedures used by organizations to track, record, and analyze costs associated with their operations.